Leveraging Location Tracking for Security and Compliance in RDC

WAUSAU is launching a new service to help banks keep track of where remote check deposits are occurring to help with KYC and AML compliance.

As Remote Deposit Capture (RDC) takes a larger foothold in banking and check transactions, regulators have taken notice and are starting to integrate RDC into Know Your Customer and Anti-Money Laundering controls and regulations, says Doug Turner, a product line manager at WAUSAU Financial Systems. Regulators want to know where items are being capture and are demanding that banks track that information for compliance, he explains.

To help meet that demand, WAUSAU is introducing a new feature called Location Awareness to help banks track such information for regulatory compliance. “Through our RFP’s we’ve been starting to see the need for identifying the location of where the items are being captured. It’s being pushed by requirements from federal regulators,” Turner notes.

The new feature, announced today at BAI Payments Connect 2014 in Las Vegas, NV, will track the IP address to determine the location of check captures and transmissions, and alerts the bank if a capture is made from an unexpected location. The bank can then investigate the transaction and determine if it is fraudulent.

“Auditors are demanding this as a component of KYC; they’re trying to stop fraud and money laundering. If a new customer signs up and in Oklahoma City and makes small deposits for one month, and then all of a sudden you start getting deposits from Guadalajara, you can track that [and respond accordingly],” Turner comments.

With Location Awareness, banks will also be able to mark each transaction with a risk rating to help it determine and organize transactions that need to be reviewed for compliance. The solution is also scanner-agnostic to help support organizations that use scanners from multiple vendors, Turner adds.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

It's also, in the end, good for the financial system. Banks are really being pushed hard by the regulators on Know Your Customer and Anti-Money Laundering compliance. I know a lot of them are not happy about the spend that they are having to devote to that, and there definitely needs to be an effort to explore more cost-effective ways to achieve AML and KYC compliance. But banks need to keep in mind that trust in the financial system is not what it once was, and every time a bank gets hit by a big fine it inspires more dislike of the industry from the public. The only way to get trust back in the system is to invest in its security and avoid the reputational damage that comes with getting hit with a big fine for not doing diligence on money laundering.